Gold trader Zarrab says he was threatened in jail for cooperating with U.S.

NEW YORK, Dec 7 (Reuters) - A Turkish-Iranian gold trader testifying for U.S. prosecutors in a criminal trial involving sanctions against Iran said on Thursday that he was removed from a New York federal jail after another inmate threatened to kill him for cooperating with authorities.

“He said that he had received instructions to kill because I was cooperating,” the trader Reza Zarrab told jurors in a Manhattan courtroom. He did not identify the person or say when the threat was made. The U.S. Bureau of Prisons did not immediately respond to a request for comment.

Zarrab said that after the encounter, he was transferred from Brooklyn, New York’s Metropolitan Detention Center to the custody of the Federal Bureau of Investigation.

The account came near the end of Zarrab’s testimony, which began last Wednesday and concluded on Thursday afternoon.

Zarrab, a Turkish and Iranian national, pleaded guilty in October to charges that he schemed to help Iran evade U.S. sanctions.

Zarrab is testifying for U.S. prosecutors against an executive from Turkey’s majority state-owned Halkbank who is accused of taking part in the scheme with Zarrab.

The executive, Mehmet Hakan Atilla, has pleaded not guilty and the bank has said that all of its transactions complied with international regulations.

U.S. prosecutors have charged nine people in the case with conspiring to help Iran evade sanctions. Only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities.

Earlier on Thursday, a lawyer for Atilla, Cathy Fleming, sought through cross-examination to undermine Zarrab’s credibility. Zarrab conceded under her questioning that he had lied repeatedly in the course of business, including to Atilla.

However, when Fleming asked Zarrab about a letter he signed to former Iranian president Mahmoud Ahmadinejad pledging to aid in “economic jihad,” Zarrab denied making such a pledge. He said he did not read Farsi and had signed the letter without knowing what it meant.

Zarrab also denied telling his uncle in a telephone call from jail “that in this country you have to admit to something you haven’t done in order to become free.” A summary of that call was included in a court filing by Atilla’s lawyers earlier this week.

Over his seven days of testimony in Manhattan federal court, Zarrab said Turkish officials took bribes and helped Iran launder money.

The case has strained ties between the United States and Turkey, both members of the NATO military alliance. President Recep Tayyip Erdogan has cast the trial as an attempt to undermine his country and its economy. (Reporting By Brendan Pierson in New York; Editing by Toni Reinhold)